1.Compute the present value of an annuity of $ 681 per year for 23 years, given

Question

1.Compute the present value of an annuity of $ 681 per year for 23 years, given a discount rate of 8 percent per annum. Assume that the first cash flow will occur one year from today (that is, at t = 1). (Round your answer to 2 decimal places; record your answer without commas and without a dollar sign).

2.You just won a contest. The prize is a lump sum payment of $ 47,232 , however, you will not receive this payment for 29 years. Compute the present value of your prize assuming a discount rate of 16 percent per annum. (Round your answer to 2 decimal places; record your answer without commas and without a dollar sign).

3.Compute the present value of an annuity of $ 618 per year for 16 years, given a discount rate of 7 percent per annum. Assume that the first cash flow will occur one year from today (that is, at t = 1). (Round your answer to 2 decimal places; record your answer without commas and without a dollar sign).

Explanation / Answer

1) PV(8%,23,$681,,1) = 7,627.71

2) PV = 47232/(1 + 0.16)29 = 638.20

3) PV(7%,16,$618,,1) = 6,246.69

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.